InterContinental to miss China hotels target

LONDON (Reuters) - The world's biggest hotelier, InterContinental Hotels Plc (IHG.L), is set to miss its target to have 125 hotels in China by end-2008, while it is seeing a short-term boost from the Beijing Olympics.

The British group, which operates InterContinental, Crowne Plaza and Holiday Inn hotels, said on Tuesday it is likely to miss its China target due to the Sichuan earthquake in May and the Chinese government's move to cool the domestic economy.

The hotelier, which is the biggest international player in China, already has 95 hotels open in the country, seven of which were opened in Beijing in the last month, and also has 93 set to open in the next two to three years.

"We are likely to fall short, but reach 125 very soon in 2009 reflecting the constraints of the government cooling the economy and the Sichuan earthquake," Chief Executive Andrew Cosslett said at first-half results briefing.

He added the Chinese government's move had slowed the pace of five-star hotel openings and the group had moved in the short-term to look more towards its mid-market brands such as Holiday Inn.

Cosslett said its three hotels at Olympic venues, including the Beijing Beichen next to the Bird's Nest stadium, were all fully booked. It has 16 hotels in the Beijing area.

"We are seeing short-term benefits, but we are looking to the long-term outlook for China," said Cosslett.

The hotelier was the first international group to enter China in 1984 and has around 20,000 rooms more than its nearest competitor. China generates around 2 percent of group profits.

(Reporting by David Jones; Editing by David Holmes)